Labor Department appointee resigns after contractor findings

WASHINGTON — A top Labor Department official in charge of helping veterans find jobs resigned this week amid findings that he had steered work to favored contractors.

Raymond Jefferson, assistant secretary of labor for veterans' employment and training service and a presidential appointee, showed a "consistent disregard of federal procurement rules and regulations, federal ethics principle and the proper stewardship of appropriated dollars," according to an internal Labor Department investigation.

A disabled veteran with degrees from West Point and Harvard Business School, Jefferson has a long history of military, academic and professional accomplishment. But an investigation by the Labor Department's Office of Inspector General found that he allegedly pressured subordinates to force federal contractors to add his choices as subcontractors onto their projects.

That "led to the circumvention of rules related to open competition," according to an agency memorandum on the investigation.

One contractor, Stewart Liff, earned $700,000 over a period of 16 months, the investigation found. His first contract paid him $200 an hour; his second, $275, the report said.

Liff's services included consulting reports on office wall colors, lighting and furniture that would improve employee performance. The colors, however, were not allowed under federal building rules, the report said.

One contractor who allegedly was forced to include Liff reportedly told Jefferson's office that Liff's services "were more than twice as much as his company had ever charged any client," the memorandum said, and "not a good value for the government."

"This is the kind of boondoggle that taxpayers have every right to expect to come to a screeching halt," said Sen. Claire McCaskill, D-Mo., whose office triggered the investigation last fall, based on a complaint from a federal whistleblower.

Neither Jefferson nor Liff, a longtime human resources and management consultant who has an extensive history of government work, could be reached for comment.

Another contractor, Ron Kaufman, also was hired as a management and leadership consultant and earned $140,000 for six days of work, the investigation found. A third, Mark Tribus, who was a West Point classmate of Jefferson, earned $3,000.

Jefferson was an infantry and Special Forces officer. He lost the fingers on his left hand in 1995 in Okinawa, Japan, protecting fellow soldiers when a hand grenade prematurely exploded during a training exercise.

In the veterans community, he was viewed as a dynamic and passionate advocate who bridled at the slow pace of the bureaucracy. He sometimes clashed with his superiors.

"He was trying to do good things," said Rick Weidman, executive director for policy and government affairs at Vietnam Veterans of America. "That place needed shaking up and he did do some shaking up. He, frankly, did more in the year-plus he was there than his predecessors did in the previous 10. What he didn't do well was take the time to get his permanent bureaucrats at the state and regional levels to buy in."

Jefferson oversaw the department's Veterans' Employment and Training Service, known as VETS, a federal effort to help veterans find jobs and protect their employment rights.

It was geared to the veterans who couldn't get job assistance from the Department of Veterans Affairs, whose employment and training programs are directed toward former service members with disabilities related to their military service.

McCaskill, chairwoman of the Senate Homeland Security and Governmental Affairs contracting oversight subcommittee, said the investigation underscores the importance of whistleblowers.

"There are lots of people out there in the federal government that know bad things are going on," she said. "They do a patriotic duty when they step up. They should not assume nothing will happen."